Spectrem’s new study on virtual advisors examines how many affluent investors are using the new technology, and offering indications that the use of such robo-advisors will grow.
But the Spectrem report also shows that investors are getting different kinds of investment information from their virtual advisor than investors get from human advisors.
Long-term care insurance is a hot topic in insurance circles, and investors using robo-advisors were more likely to have received information on that type of insurance from their advisor than those that do not use such services. Thirty-six percent of robo-advisor users said they got long-term health care insurance information from their advisor, while only 22 percent of human advisor clients got such information from their advisor.
The Spectrem study also looked at affluent investors who use advisor services that provide face-to-face meetings with advisors only through video chat services such as Skype or FaceTime. They, too, were more likely to get long-term care insurance information from their primary advisor.
Thirty-eight percent of investors using video-chat advisors already own long-term care insurance, while 30 percent of investors with human advisors do so and 26 percent of robo-advisor users already own long-term care insurance.
There was also far more interest in long-term care insurance among investors using technology-based advisors than those using human advisors. Approximately 20 percent of affluent investors using either robo-advisors or video-chat advisors said they were likely or very likely to buy long-term care insurance in the future, while only 7 percent of investors using human advisors said they were likely to do so.
The study also showed that investors using technology-based advisors were much more likely to have widely diverse portfolios, although the investors using human advisors had more money in their investments. This is probably due to the fact that the technology-based advisor users are predictably younger and have less assets to invest.
For instance, 23 percent of robo-advisor users are invested in exchange traded funds, and 25 percent of video-chat advisor users have funds in ETFs, while only 9 percent of human advisor users are invested in ETFs. The mean value of those investments on average were similar, however.
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